German industry groups warn U.S. on tariffs before Trump-Juncker meeting

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BERLIN (Reuters) - German industry groups warned on Sunday, before European Commission President Jean-Claude Juncker meets U.S. President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.

FILE PHOTO: European Commission President Jean-Claude Juncker gestures during a joint news conference with European Investment Bank President Werner Hoyer at the EC headquarters in Brussels, Belgium, July 18, 2018. REUTERS/Yves Herman

Citing national security grounds, Washington imposed tariffs on steel and aluminium imports from the EU, Canada and Mexico on June 1 and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting on Wednesday.

“The tariffs under the guise of national security should be abolished,” Dieter Kempf, head of Germany’s BDI industry association said. Juncker should tell Trump that the United States would harm itself with tariffs on cars and car parts, he told Welt am Sonntag newspaper.

The German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported. “Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

German Economy Minister Peter Altmaier told Deutschlandfunk radio on Sunday he hoped it was still possible to find a solution that was attractive to both sides. “For us, that means we stand by open markets and low tariffs,” he said

He said the possibility of U.S. tariffs on EU cars was very serious and stressed that reductions in international tariffs in the last 40 years and the opening of markets had resulted in major benefits for citizens.

EU officials have tried to lower expectations about what Juncker can achieve, and played down suggestions that he will arrive in Washington with a novel plan to restore good relations.

Altmaier said it was difficult to estimate the impact of any U.S. car tariffs on the German economy, but added: “Tariffs on aluminium and steel had a volume of just over six billion euros. In this case we would be talking about almost ten times that.”

He said he hoped job losses could be avoided but noted that trade between Europe and the United States made up around one third of total global trade.

“You can imagine that if we go down with a cold in the German-American or European-American relationship, many others around us will get pneumonia so it’s highly risky and that’s why we need to end this conflict as quickly as possible.”

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag the German economy had for decades counted on open markets and a reliable global trading system but added: “Every day German companies feel the transatlantic rift getting wider.”

Reporting by Michelle Martin; editing by David Stamp; Editing by Andrew Bolton and David Stamp